1. WSI CONFIDENTIAL Seasonal Forecasting 101 Dan Leonard dleonard@wsi.com Dr. Todd Crawford tcrawford@wsi.com

2. WSI CONFIDENTIAL Weather Forecasting and the Markets Energy Trading -Natural Gas, Oil and Power -Wind/Hydro/Solar Commodities Insurance

3. WSI CONFIDENTIAL Seasonal Forecasting and Market Impacts winter forecasts issued Traders initially hopeful for cold winter Slow downward trend in price once reality of warm weather sets in

4. WSI CONFIDENTIAL Updated Forecast Impact on the Markets Updated morning forecasts trend colder Numerical computer models and medium range forecast changes can play a major role in short term prices Midday models follow through

5. WSI CONFIDENTIAL Seasonal Forecasting @ WSI - Methodology Dynamical Climate Forecasting Model (NCAR CCM3.6) Run @ WSI Coarse resolution (2.5 x 2.5 deg), driven by initial ocean temp anomalies 2 versions of model, complementary skill 8 runs (ensemble) per model version to further increase skill Ensemble mean is most skillful forecast 3 Proprietary Statistical Models Based on historical relationships between indices & weather Singular/Multivariate regression, analog

6. WSI CONFIDENTIAL Statistical Models ENSO Solar Cycle PDO Snow Cover Index 20 Stat Model A Stat Model B Stat Model C

7. WSI CONFIDENTIAL Seasonal Forecast Process Final Climate Model Output WSI Final Forecast Climate Model v1 (raw) Stat Model 2 Post- process Climate Model v2 (raw) Post- process Human touch Blend all Inputs Stat Model 3 Stat Model 4

8. WSI CONFIDENTIAL Seasonal Forecasting @ WSI – Overview Forecasts issued for US and Europe US forecasts issued twice-monthly Tuesday mid-month (between 13 th -19 th ) Last trading day of month Temperature and precip forecasts produced Next three calendar months (Feb, Mar, Apr) Next two seasons (FMA, MAM) Tabular, graphical, and discussion format

9. WSI CONFIDENTIAL Forecasting ModelSkill Climate Model57% Stat Model A59% Stat Model B56% Stat Model C59% Ensemble Mean61% Models have similar skill Seasonal Forecasting Tools - Skill WSI Forecasts (October 2000-present)64%

10. WSI CONFIDENTIAL So, What is “Normal” in an Ever-Changing Climate? 30-year normals are typically used since Atlantic/Pacific cycles are on multidecadal time scales But these are only updated once a decade, mainly for convenience No reason why you can’t use 13, 26, or 36 year normals if they work better! Historically, which normals have worked best at predicting near-term temps?

11. WSI CONFIDENTIAL Which Normals are Best to Use Going Forward? 15-20 years: Recent trends, solar cycle? 40-45 years: Pacific cycle 60 years: Atlantic cycle Using standard 30-yr avg (changes once every 10 years) is even worse than using trailing 30-yr avg Using standard 30-year even worse!

12. WSI CONFIDENTIAL New 30-yr normals (1981-2010 replaces 1971-2000) Winter Summer New Normals Warmer Most Locations, Especially during Winter

13. WSI CONFIDENTIAL Near-Term: Summer Temps Warming, Winter Cooling? US Winter Temps US Summer Temps

14. WSI CONFIDENTIAL Weather More Volatile Now? “We’ve just had two consecutive top-5 warmest summers and two consecutive top-10 coldest winters. Are these sorts of extremes the new normal?” - September 15,1937

15. WSI CONFIDENTIAL The last 2 winters in the US hottest back-to-back summers on record 2011 2 nd hottest summer on record, just behind 1936 Trend Towards Hotter Summers

16. WSI CONFIDENTIAL Atlantic Multi-decadal oscillation (AMO) Example of a positive phase of the AMO Tripole of water temp anomalies

17. WSI CONFIDENTIAL Atlantic Ocean pattern dictates US summer temperatures Atlantic Multi-decadal Oscillation

18. WSI CONFIDENTIAL Trend Towards Colder Winters The last 5 winters in the US have been colder (in aggregate) than the long-term NCDC normals (1895-2010) This is the first time this has occurred since the winters of 1983/84 to 1987/88 The “new normal”?

19. WSI CONFIDENTIAL Pacific Decadal Oscillation (PDO) PDO pattern displays a “horseshoe” effect in the SST anomalies, with cold temps bounded by warm temps to the south, east and north + -

20. WSI CONFIDENTIAL The PDO/PNA connection A positive PDO favors the development of a positive Pacific/North America pattern (+PNA)

21. WSI CONFIDENTIAL Pacific Ocean pattern plays major role in US winter temps Last cold winter regime 1950s-1970s

22. WSI CONFIDENTIAL Positive Phase NAO Mild westerly flow dominates Arctic air remains north Warmer eastern/central US Negative Phase NAO Cold northerly flow into US Arctic air masses descend from north Colder eastern/central US North Atlantic Oscillation (NAO)

23. WSI CONFIDENTIAL North Atlantic Oscillation (NAO) NAO describes the strength of the polar vortex Strong vortex (pos NAO) = stronger Atl jet stream Weak vortex (neg NAO) = N Atl blocking, tapping Arctic air Last two winters have had extremely negative NAO

24. WSI CONFIDENTIAL NAO Correlations, Winter vs Summer Subtropical ridge tends to be more active in the summer Winter Summer

25. WSI CONFIDENTIAL NAO clearly strongly related to US winter temps

26. WSI CONFIDENTIAL Mid-latitude October Atlantic SSTs modulate NAO -AMO lends +NAO regime Increased SST gradient = Enhanced polar jet Decreased SST gradient = Weaker/amplified polar jet +AMO lends -NAO regime

27. WSI CONFIDENTIAL Solar cycle minima enhance negative NAO

28. WSI CONFIDENTIAL Solar Cycles Through History Hadley Centre (UK) oldest continuous temp measurements Little Ice Age (1600s) occurred during solar blackout Other cooling during solar minima in 1810s, 1900s, 1960s Recent solar cycle weakest in at least 100 years

29. WSI CONFIDENTIAL Siberian Snow Cover – NAO correlations Data suggests snow cover most important during weeks 41-44 (October) Asian snow cover build in October Impacts complex dynamic processes (Cohen et al.) that modulate blocking frequency/intensity Pattern most sensitive to snow build in October due to rapidly increasing potential energy source as poles darken/cool

30. WSI CONFIDENTIAL Sudden stratospheric warmings drive negative NAO In about half of all winters, dynamical processes produce a sudden and extreme warming of stratosphere (SSW) This warming often propagates back down to the polar surface, resulting in long-lived negative NAO events Ability to predict whether a SSW event will occur in key to predicting winter NAO Have had SSW events in 8 of last 10 winters

31. WSI CONFIDENTIAL NAO Review Primary NAO Drivers AMO Solar Activity Siberian Snowcover in OCT SSWs

32. WSI CONFIDENTIAL El Nino Forcing Tropical convection enhanced over warmest SSTs – ridging poleward and downstream WARM

33. WSI CONFIDENTIAL La Nina Impacts Aggregate 500 mb pattern for last 14 mod/strong La Nina events Focused convection produces downstream and poleward response at mid-latitudes over North Pacific and western US Dateline ridging guides Arctic air into western Canada & western US Cold water associated with La Nina focuses tropical convection (t-storms) over Indian Ocean/Indonesia

34. WSI CONFIDENTIAL La Nina Seasonal Impacts – DJF Temperature Aggregate temp. anom. pattern for last 15 mod/strong La Nina events Strongest warm signal: 13 of 15 events above-normal in south-central US Strongest cold signal: 11 of 15 events below-normal in north-central US

35. WSI CONFIDENTIAL Colder winters recently, regardless of ENSO state… Last 3 winters coldest stretch since mid-1980s! Typical ENSO correlations failed the last 2 years ‘09-’10 ‘08-’09 ‘10-’11 Strong El Nino Strong La Nina Weak La Nina

36. WSI CONFIDENTIAL Pacific Decadal Oscillation (PDO) PDO pattern displays a “horseshoe” effect in the SST anomalies, with cold temps bounded by warm temps to the south, east and north + -

37. WSI CONFIDENTIAL If PDO/ENSO out of phase, textbook signal is gone El Nino with positive PDO El Nino with negative PDO

38. WSI CONFIDENTIAL La Nina Stratified by NAO Phase La Nina + Negative NAO La Nina + Positive NAO Cold north/west, warm south La Nina signal NAO provides offset to eastern/central US temps

39. WSI CONFIDENTIAL The Bottom Line ENSO taken alone is a poor predictor of seasonal variability over the lower 48 NAO and PNA, although more difficult to predict, have a much stronger seasonal correlation

40. WSI CONFIDENTIAL Winter 07-08: A Winning Season

41. WSI CONFIDENTIAL Directionally Correct WSI fcst obs WSI err WSI dir correct? Pacific -0.8 0.2Yes Mountain -0.2 -1.3 1.1Yes W. North Central -0.9-1.50.6Yes W. South Central 1.12.3-1.2Yes E. North Central -0.30.9-1.2 No E. South Central 1.42.6-1.2Yes 0.2 1.5 -1.3Yes Mid-Atlantic 0.32.2-1.9Yes 1.12.9-1.8Yes MAE WSI fcst 1.16 Dir corr 8 of 9 climo fcst 1.80 Anomaly correlation 0.88

42. WSI CONFIDENTIAL 2011-2012 Forecast October forecast called for a cold winter north, especially in January

43. WSI CONFIDENTIAL A December Disaster Sometimes Things Don’t Work Out According to Plan

44. WSI CONFIDENTIAL Rationale in October Emerging La Nina Event Strong Negative Pacific Decadal Oscillation Warm North Atlantic (positive AMO) Accelerating Snow Cover Build Historically Low Arctic Sea Ice Positive signs for a cold winter north…

45. WSI CONFIDENTIAL Possible Wild Card: Different Tropical Pacific Convection Than 2010? Warmer Indian Ocean, cooler Indonesia this year More MJO phase 2/3 (warmer) activity this winter? ?

46. WSI CONFIDENTIAL Tropical Convection shifts east with time -MJO starts the season over the Indian Ocean but eventually Progresses to a more typical Nina position over Indonesia

47. WSI CONFIDENTIAL Pacific Not to Blame LA NIÑA Don’t look at me!! Classic –PDO/Nina setup Persistent Convection Mean Ridge Axis

48. WSI CONFIDENTIAL Look to the Atlantic/Arctic… Split flow pattern in the west Very strong polar vortex Fast, zonal regime northern tier of the US

49. WSI CONFIDENTIAL 2011-12 NAO: Positively Awful NAO has been positive since mid November Most positive NAO ever in December

50. WSI CONFIDENTIAL State of the Stratosphere Stratosphere has been colder than normal so far, indicating a strong polar vortex

51. WSI CONFIDENTIAL Solar Spike Solar Activity still relatively low but a sudden spike in November

52. WSI CONFIDENTIAL AMO Index: Missing the Smaller Picture? Late Oct 2010 Late Oct 2011 AMO = +0.367 AMO = +0.103

53. WSI CONFIDENTIAL Extreme snow deficit for the north central, NE and Great Basin/NW. Positive snowfall anomalies confined to the southern plains and lower Rockies Snowcover : Unpredictable but Important

54. WSI CONFIDENTIAL 850mb T anom Sfc T anom Snowless plains and midwest: Without snowcover, polar airmasses modify quickly Albedo correlation highest in tree-less areas like the plains Snowcover’s Role in Airmass Modification

55. WSI CONFIDENTIAL Hope for a Back End Winter? Both the GFS and ECMWF depict major SWE developing next week and intensifying during the following week

56. WSI CONFIDENTIAL Will the NAO finally flip negative? -Good North Atlantic block -Still a strong Pacific Jet -PV is weaker and displaced, but not gone…

57. WSI CONFIDENTIAL Latest ECMWF Weekly -North Atlantic block holds through first week of FEB

58. WSI CONFIDENTIAL February and March Forecast -Cold and Stormy North and West -Warm and dry South

59. WSI CONFIDENTIAL Seasonal Forecasting 101 Dan Leonard dleonard@wsi.com Dr. Todd Crawford tcrawford@wsi.com